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What is an account payable?

Harold Averkamp, CPA, MBA

Definition of an Account Payable

An account payable is an amount owed to a supplier or vendor for goods or services that were provided in advance of payment. However, some people use the term only if the amount is already recorded in the general ledger account Accounts Payable. (Until it is, they refer to the amount as one of the company’s accrued liabilities.) For others, it is an account payable even if it is not yet recorded in Accounts Payable.

Example of an Account Payable

Assume that a corporation received repair services from Joe’s Plumbing LLC on August 29. On August 31 the corporation receives an invoice from Joe’s for $900. The invoice states that the $900 is due within 30 days. After reviewing and approving the invoice, the corporation enters Joe’s invoice into its accounting records with a credit to Accounts Payable and debit to Repairs and Maintenance Expense.

Until the invoice from Joe’s Plumbing Service is paid, Joe’s invoice serves as a supporting document for the balance in the corporation’s Accounts Payable. (The invoice is also a supporting document for the balance in Joe’s Accounts Receivable.)

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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on

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